WWE Announces 2013 Q1 Results: Revenues Flat , PPV Up, Vince McMahon Comments

Pay-Per-View revenues increased 12% to $15.1 million as compared to $13.5 million in the prior year quarter reflecting the performance of our Royal Rumble and Elimination Chamber pay-per-views. Buys for these events increased 17% from the prior year quarter, demonstrating their creative strength and audience appeal. Additionally, the average revenue per buy increased 5% from the prior year quarter due, in part, to an increased proportion of buys to view our events in high definition, which generally attracts higher retail prices. Increases in the number of buys and revenue per buy, however, were partially offset by lower buys for events in prior periods.

Television revenues increased 15% to $37.5 million from $32.5 million in the prior year quarter primarily due to the production and licensing of new programs. During the latter half of 2012, an additional hour of Raw was licensed to the USA Network, a new original series, the WWE Main Event, was licensed to ION Television, and a Saturday morning kids' show, WWE Saturday Morning Slam, was introduced on The CW Network. Growth also reflected, to a lesser degree, contractual increases for our existing programs both domestically and internationally.

Venue Merchandise revenues of $5.1 million were essentially flat to the prior year quarter. Increased sales of merchandise at our domestic events were offset by the impact of our Fan Axxess activities in the prior year quarter. Total domestic paid attendance increased 21% while per capita merchandise sales at those events increased 6% to $10.29 in the current year quarter.

Consumer Products

Revenues from our Consumer Products businesses decreased 6% to $33.2 million from $35.5 million in the prior year quarter, primarily due to declines in our Home Entertainment business as described below.

Home Entertainment net revenues were $7.0 million as compared to $9.2 million in the prior year quarter. The 24% decline reflected a reduction in revenue from our international licensing activities and adjustments to prior period sell through estimates. Revenue from our international licensing activities declined by approximately $1.3 million due to the recognition of greater minimum guarantees in the prior year quarter. Domestic home entertainment revenue fell approximately $0.9 million, or 13%, as a 47% increase in shipments to over 1.2 million units was more than offset by a net $3.3 million impact from prior period sell through adjustments. The quarter included an unfavorable adjustment for lower than anticipated sales of prior period releases compared to a positive adjustment in the prior year quarter. The average price per unit of $9.52 remained essentially unchanged from the prior year quarter.

Licensing revenues of $24.0 million were essentially unchanged from the prior year quarter. Revenue in the quarter reflected a $2.1 million positive impact associated with the bankruptcy of our former video game licensee, THQ, and the transition to a new video game licensee, Take-Two Interactive. This positive impact was offset by lower revenue from video game, toys and other products, with the aggregate decline coming from our international markets. Excluding the impact of the video game transition, estimated sales of our video game declined approximately 12% with a corresponding reduction in average retail prices, and royalties from the sale of toy products declined approximately 6%, or $0.4 million, from the prior year quarter. In aggregate, excluding the impact of the video game transition, royalties from the sale of licensed products declined approximately 23%, or $2.2 million, in international markets.

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